Technip, a leading worldwide engineering and construction company, has agreed to pay $338 million to avoid US prosecution and settle civil claims in relation to charges for conspiracy and violation of the US Foreign Corrupt Practices Act 1977 ("FCPA").

The company participated in a joint venture scheme which, over a period of 10 years, bribed Nigerian government officials in order to win multi-billion dollar contracts to build liquefied natural gas (LNG) production facilities.

The Securities and Exchange Commission (SEC) stated that Technip failed to detect or prevent bribery as required by the FCPA, falsified records to conceal the bribery payments and failed to implement adequate controls to ensure compliance with the FCPA. Any due diligence which was carried out was believed to be a token effort.

Technip have consented to a court order to pay $98 million in ill-gotten profits to resolve the civil claims. The company will also pay an additional penalty of $240 million in relation to criminal proceedings as part of a deferred-prosecution agreement with the US Department of Justice. Technip will not be prosecuted provided they pay the fines and make reforms within a period of 2 years. A monitor will be appointed to review Technip's compliance with the FCPA and French anti-corruption laws.

Technip's penalty together with settlements paid by its joint venture partners is a combined $917 million which represents the largest combined settlement to date resulting from an FCPA violation. However, more fines are still expected in this matter.

Organisations that are subject to the provisions of the FCPA should review their anti-bribery policies in light of the severe penalties imposed in this case. Furthermore, organisations are urged to start preparing now for the UK Bribery Act 2010 which is expected to enter into force before the end of this year. Bribery is now being rigorously tackled worldwide and companies who choose to violate these laws or who aren't organised enough to ensure compliance will suffer the consequences. As illustrated above, these consequences are certainly considerable!

Disclaimer

The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.

© MacRoberts 2010